At a press conference in the rebel-held city in the east of the country, McCain called on the international community "to recognise the Transitional National Council as the legitimate voice of the Libyan people. They have earned this right".
After meeting with rebel leaders the senior senator said Benghazi, run by the TNC, was "a powerful and hopeful example of what a free Libya could be”.
"I met with all the key leaders of the Council and applaud their remarkable progress in their struggle for liberation," he said.
Senator McCain is the highest-ranking US official to visit the rebel-held east of the country since the uprising began two months ago.
Meanwhile, insurgents struggling in their bid to oust Moamer Kadhafi on Friday hailed a US decision to deploy armed drones over Libya.
"We are so pleased," media liaison official for the rebels' TNC, Mustafa Gheriani, told the news agency AFP.
"We hope that this can bring some relief to the people in Misrata," he added, referring to the rebel-held city in western Libya which has been pounded by Kadhafi forces for more than six weeks, leaving hundreds dead.
US President Barack Obama authorised deployment of missile-carrying drone
warplanes over Libya "because of the humanitarian situation," US Defence Secretary Robert Gates said on Thursday.